Topline
Changpeng Zhao—founder of the cryptocurrency trading platform Binance—cannot return to his home in the United Arab Emirates for now, a federal judge in Seattle ruled Monday, according to Bloomberg and Reuters, as the founder of the world’s largest crypto exchange awaits sentencing on anti-money laundering and sanctions violations.
Last week, Changpeng Zhao pleaded guilty to anti-money laundering and sanctions violations.
Ben McShane/Sportsfile for Web Summit via Getty
Key Facts
U.S. District Judge Richard Jones ruled Monday that, for now, Zhao cannot leave the United States after prosecutors argued there is a “substantial risk” that Zhao could flee and not return to the U.S., Bloomberg reported.
Prosecutors also noted there is a risk in allowing Zhao to return to the UAE given that the U.S. does not have an extradition treaty with the country.
Lawyers for Zhao said their client was not a flight risk and noted that he came to the U.S. voluntarily to take responsibility for what happened, according to Reuters.
What To Watch For
The judge still needs to rule on whether Zhao can return to the United Arab Emirates ahead of his February sentencing.
Surprising Fact
Zhao is a citizen of both the UAE and Canada.
Key Background
Last week, Zhao pleaded guilty to charges as part of a $4 billion settlement with federal regulators, and stepped down as chief executive of Binance. The settlement was made with the Justice Department, Treasury Department and Commodity Futures Trading Commission, which claimed Binance failed to prevent “suspicious transactions with terrorists.” The government said that through a multiyear investigation, they found the cryptocurrency giant allowed bad actors on their platform—including some linked to transactions involved with narcotics and child sex abuse. Binance did not have “protocols to flag or report transactions” involving money laundering risks, the Justice Department alleged. Employees were aware of these practices, the DOJ said, noting one compliance staff who wrote, “we need a banner ‘is washing drug money too hard these days – come to binance we got cake for you.’” Zhao admitted he had made mistakes in a post on X, the platform formerly known as Twitter, saying he must “take responsibility” and do what’s best for “our community, for Binance, and for myself.” The legal settlement is the latest in a monthslong crackdown on alleged illegal activity by cryptocurrency firms. Binance as well as rivals Coinbase and Kraken are facing lawsuits from the Securities and Exchange Commission alleging they skirted federal requirements to register as securities exchanges, and FTX founder Sam Bankman-Fried was convicted of fraud in November after his crypto empire collapsed last year.
Tangent
Last week’s settlement follows June charges against Zhao and Binance that allege they misused customer funds and in some cases diverted them to a trading entity controlled by Zhao. Binance was also accused of moving billions of dollars to another company Zhao controlled, in the June lawsuit. The SEC alleged Zhao and Binance publicly claimed the company was created as a separate, independent trading platform for U.S. investors but the company and its founder secretly controlled Binance US platform’s operations behind the scenes. This case is still ongoing.
Big Number
$175 million. That’s how much Zhao agreed to as a bond as part of the bail agreement last week. He also agreed to pay a $50 million fine as part of the plea deal.
Further Reading
Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With US (Forbes)
Here Are All The Crypto Firms Facing Charges From Regulators This Year (Forbes)
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Copyright for syndicated content belongs to the linked Source : Forbes – https://www.forbes.com/sites/anafaguy/2023/11/27/ex-binance-chief-cz-must-stay-in-us-after-guilty-plea-for-now/